UK Ministry of Defence flies 1 million Euros (Cash) to troops in Cyprus, warning or precaution?

Just heard this on BBC radio 5, it turns out that an RAF plane has flown out to Cyprus with 1 million Euros in cash to make sure that the few thousand British troops will not suffer due to the ongoing problems there.

The UK government have already promised that any service people with accounts in Cypriot banks will be directly compensated if there is a savings grab in the next few days.
This injection of hard currency will be offered in short-term loans to prevent any hardship due to ATM's not issuing money and the continued closure of banks there.

My concern about this is that the UK, especially the MOD rarely does anything as practical as this unless there is a very real threat that something is seriously wrong. I wonder is this a warning that Cyprus is effectively ruined and there are real concerns that the banks will either stay closed for a prolonged period or are actually close to folding?

Thoughts welcome from anyone more economically minded than I am, just putting this out there as a background twist to an already worrying story of a small nation in Europe.

Quite a few links out there already, take your pick from a Google search: Google results

reply to post by grainofsand

starred
imo the cat is out of the bag. eu will not back away from this now.
too much face to lose.
this is robbery on a grand scale perpetrated by the usual
lobbyists and legislators. over 60,000 expats live there
and those who receive pensions from the british government are
assured that the freeze on payments is a precautionary move.

a radio 4 financial article stated that any and all agreed taxes/
confiscations/robberies will be based on account balance from last friday when
the news broke.
this rings an alarm bell because that implies that if a depositor draws
all of his monies from the account and migrates to another offshore offshore,
then they will be followed by a tax/c/r invoice from the amount above the threshold.

it will be interesting to follow events post-lockdown.

regards fakedirt.

Originally posted by fakedirt
reply to post by grainofsand

 

starred
imo the cat is out of the bag. eu will not back away from this now.
too much face to lose.

I agree, it seems that the EU lawmakers see it and are unable to run away without making it plain to us civvies how #ed it really is?

Latest on this, according to BBC 4 news at 22.00, is that a Cypriot minister is in Russia trying to get more funding. This will have to be arranged by this Thursday, when the banks reopen.

I wonder what effect this will have on the Euro and Cyprus's continued use of the Euro?

Looks like the Government is back tracking a little on the original levy placed on all bank savings. No levy to be applied to under 20,000 euro savings.

Nice to see a pragmatic move on behalf of the MoD rather than running around with its hair on fire days behind events.

You are right though. This has the potential to be very bad. I cant see why anybody in Cyprus would leave their cash in the bank when they open. They are going to get a bank run whatever they say at this point.

I dont know what will happen but i'm pretty sure 'back to normal' isn't one of the options.

Originally posted by justwokeup
Nice to see a pragmatic move on behalf of the MoD rather than running around with its hair on fire days behind events.

That's the bit that concerned me.
The MoD and pretty much most UK civvy departments are usually about damage limitation after an event, so this pre-emptive move tells me the outcome is already known by people higher up than I will ever be.
Of course I could be wrong, maybe a strategic planner suggested 'there may be hardship for service families if X or Y happens' so someone in charge of a budget decided to carry out preventative action...there is not an election coming up though so it is unusual at the very least.